The live Webcast, sponsored in part by the Internal Revenue Service, entitled  "Ethics: Our Joint Responsibility," featured panelists from both the IRS and the private sector, who reviewed the ethical obligations that tax professionals must uphold. 

In particular, the Webcast addressed the nuances of Treasury Circular 230, which governs practice before the IRS, and the misconceptions surrounding it. The familiar ethical dilemmas faced by tax professionals also served as a theme of the program, as practitioners from across the United States submitted questions to panelists via email and phone.

Robert Steinbuch, Deputy Senior Counselor to the Commissioner, National Headquarters, IRS, and Stanley Oshinsky, Supervisory Attorney, Office of Director of Practice, IRS reviewed the different rules binding practitioners to maintain a code of behavior when representing clients before the IRS.  Whereas attorneys, CPA’s and Enrolled Agents are all bound by the Treasury Circular 230, attorneys and CPA’s are further bound by their individual states, and can face disciplinary action under both. Disciplinary action can include a suspension of two to four years, or disbarment. 

According to Steinbuch, the violations that frequently incur an IRS investigation are tax shelter schemes, tax fraud schemes, and abuses of due process rights. If a practitioner is suspected of violating the Circular 230, the IRS will send the practitioner an allegation letter, giving the individual the opportunity to explain his actions. The IRS will then determine whether an investigation should take place.

The obligation of a tax professional to disclose what he/she believes to be an error on a return already filed by another practitioner served as a hot topic of debate. Under Circular 230, the practitioner must inform the client of the error, but the practitioner is not legally bound to notify the IRS of the other practitioner’s actions. Panelists, however, affirmed the importance of maintaining high standards, regardless of the technicalities of the law. "We have to make sure that we police ourselves," Steinbuch said.      

Circular 230 can serve as an important resource for practitioners as they determine which actions are legal and which are not. For instance, Circular 230 lists which tax shelters are legal -- a list that the IRS is now working to update. Circular 230 also advises practitioners of their ethical responsibility when providing an opinion to clients, and of the standards that they face in regard to advertising. 

In addition to Steinbuch and Oshinsky, Les Witmer, APR, a 23-year veteran of the Internal Revenue Service, appeared on the show, serving as the program moderator. Other panelists included Stanley H. Hackett, Partner, Troutman Sanders, and Carol Thompson, Enrolled Agent.  Materials referred to during the program -- including Circular 230 Regulations, the AICPA Code of Professional Conduct, and the Summary of Abusive Trust Schemes -- are currently available on Tax Talk Today under "Resources."

Viewers may view the archived Webcast at Tax Talk Today.

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